Newell Manufacturers’ Out of doors & Recreation Section Sees 2.5 % Q2 Gross sales Development

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Newell Brands reported that sales in its outdoor and leisure segment reached $427 million compared to $453 million in the same period last year, down 5.7 percent. The declines reflect core sales growth of 2.5 percent, offset by the impact of exiting low-margin categories and unfavorable foreign exchange rates.

The most important brands in the Outdoor & Recreation segment include Campingaz, Coleman, Contigo, ExOfficio and Marmot. Smaller brands are Aerobed, Bubba and Stearns.

Reported operating income for the Outdoor & Recreation segment was $46 million, or 10.8 percent of revenue, compared to $48 million, or 10.6 percent of revenue, for the same period last year. Normalized operating income was $52 million, or 12.2 percent of revenue, compared to $52 million, or 11.5 percent of revenue, in the prior-year period.

Company-wide, Newell Brands reported net sales of $2.5 billion, down 6.5 percent from the same period last year, as core sales growth of 1.7 percent was driven by the impact of the sale of the CH&S business at the end of the first quarter of 2022 has been balanced. unfavorable exchange rates as well as exit from categories and retail stores. Net sales were above the level of the second quarter of 2019, excluding the CH&S business in both periods.

Newell had forecast sales for the quarter to be between $2.52 billion and $2.57 billion.

The company reported net income of $204 million, or $0.49 diluted earnings per share, compared to $197 million, or $0.46 diluted earnings per share, in the prior-year period. Normalized net income was $236 million, or $0.57 normalized diluted earnings per share, compared to $239 million, or $0.56 normalized diluted earnings per share in the prior year period.

The non-GAAP EPS of 57 cents beat Newell’s guidance, which calls for normalized net income in the range of 45 to 48 cents per share, and Wall Street’s consensus estimate of 47 cents.

Newell brands also include Rubbermaid, FoodSaver, Calphalon, Sistema, Sharpie, Paper Mate, Dymo, EXPO, Elmer’s, Yankee Candle, Graco, NUK, Rubbermaid Commercial Products, Spontex, Oster, Sunbeam and Mr. Coffee. The Outdoor & Recreation segment accounts for around 14 percent of sales. The four other segments are Commercial Solutions, Home Appliances, Home Solutions, Learning and Development.

“We are pleased with the second quarter results which demonstrate the strength of our portfolio and another quarter of excellent execution by our team in a challenging environment. Core sales increased 1.7 percent, in addition to a year-over-year comparison of 25.4 percent, as Q2 was the company’s eighth consecutive quarter of core sales growth. Normalized operating margin improved 100 basis points year-on-year despite significant inflation,” said Ravi Saligram, CEO of Newell Brands. “Over the past few years, we have evolved into a more agile, consumer and customer-centric organization and are confident that we have the right strategies in place to navigate the weakening macro backdrop while building competitive advantage.”

Chris Peterson, President and Chief Financial Officer, said, “We delivered strong results in the second quarter as we remained financially disciplined and in July we successfully implemented the first wave of Project Ovid, a significant milestone in Newell’s journey to transform the supply chain. We are updating our FX outlook for full year 2022 while maintaining our sales and earnings outlook on a constant currency basis.”

Newell’s updated full-year outlook provides the following:

  • Revenue is expected to be between $9.76 billion and $9.98 billion, down from the previous guidance of $9.76 billion to $9.98 billion.
  • Core revenues are still expected to grow flat at 2 percent
  • Normalized operating margin is expected to be between 11.2% and 11.4%, up from the previous guidance of 11.5% to 11.8%.
  • Normalized earnings per share are expected to be in the range of $1.79 to $1.86, down from the previous guidance of $1.85 to $1.93